Assocham for creation of Rs 1,000-crore SME fund in Uttarakhand

DEHRADUN: Expressing concern over the state of small and medium enterprises (SMEs) in Uttarakhand, industry body Assocham on Thursday sought creation of Rs 1,000-crore fund for the development of such units in the hill state.

"Twenty five per cent of small and medium enterprises in Uttarakhand have shut shop due to absence of proper incentives from the government," Assocham Secretary General D S Rawat said in his address to the SME's Conference on Banking and Financial Solutions for Sustainable Growth here.

If the state government does not wake up now to the plight of SMEs in Uttarakhand, it would be too late, he said.

Besides strongly pitching for a separate credit policy for SMEs in the state, Rawat also demanded creation of a Rs 1,000 crore fund exclusively for SMEs to drag them out of the red.

"If the state government does not want any more SMEs to down shutters, it will have to create a fund of Rs 1,000 crore as a mechanism to provide affordable finances to the SMEs," he said.

Echoing Rawat, SME Council Chairman P K Jain, who was also at the conference, said finance is the key input for sustained growth of small scale sector and its accessibility continues to be a matter of concern.

Despite their economic significance, SMEs face a number of bottlenecks that prevent them from achieving their full potential, he said.

Apart from their inability to access timely and adequate finance, there are a few more issues faced by SMEs in the country, including lack of infrastructure and multiple regulating agencies.

The infrastructural facilities for SMEs in India have not reached the desired level restricting private initiatives, Jain said, adding that creation of better infrastructural facilities for SMEs must receive greater priority.

The SME Council Chairman also said multiple regulating agencies lead to harassment and inspections with greater impact on operations of SMEs than on larger units.

Describing SMEs as the key drivers of Indian economy, Jain said if the country has to achieve the double digit growth, it is important to extend the much needed infrastructure and finance to enable them to bolster the Indian economy and foreign trade.

Jain also appreciated the initiatives undertaken by various banks by starting dedicated SMEs cells to extend support to them and make them globally competitive in terms of product quality, marketing strategy and product positioning.